The Practice of Industrial Policy: government-business coordination in africa and PDF
Preview The Practice of Industrial Policy: government-business coordination in africa and
The Practice of Industrial Policy UNUWorldInstituteforDevelopmentEconomicsResearch(UNU-WIDER)wasestab- lished by the United Nations University as its first research and training centre, and startedworkinHelsinki,Finland,in1985.ThemandateoftheInstituteistoundertake applied research and policy analysis on structural changes affecting developing and transitional economies, to provide a forum for the advocacy of policies leading to robust, equitable, and environmentally sustainable growth, and to promote capacity strengtheningandtraininginthefieldofeconomicandsocialpolicy-making.Itsworkis carried out by staff researchers and visiting scholars in Helsinki and via networks of collaboratingscholarsandinstitutionsaroundtheworld. UnitedNationsUniversityWorldInstituteforDevelopment EconomicsResearch(UNU-WIDER) Katajanokanlaituri6B,00160Helsinki,Finland www.wider.unu.edu The Practice of Industrial Policy Government–Business Coordination in Africa and East Asia Edited by John Page and Finn Tarp AstudypreparedbytheUnitedNationsUniversityWorldInstitute forDevelopmentEconomicsResearch(UNU-WIDER) 1 OUPUNCORRECTEDPROOF–FIRSTPROOF,9/2/2017,SPi 3 GreatClarendonStreet,Oxford,OX26DP, UnitedKingdom OxfordUniversityPressisadepartmentoftheUniversityofOxford. ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship, andeducationbypublishingworldwide.Oxfordisaregisteredtrademarkof OxfordUniversityPressintheUKandincertainothercountries ©KoreaInternationalCooperationAgency2017 ©Chapters1and14©UnitedNationsUniversityWorldInstituteforDevelopment EconomicsResearch(UNU-WIDER) Themoralrightsoftheauthorshavebeenasserted FirstEditionpublishedin2017 Impression:1 Somerightsreserved.Thisisanopenaccesspublication.Exceptwhereotherwisenoted, thisworkisdistributedunderthetermsofaCreativeCommonsAttribution-Non Commercial-ShareAlike3.0IGOlicence(CCBY-NC-SA3.0IGO),acopyofwhich isavailableathttps://creativecommons.org/licenses/by-nc-sa/3.0/igo/. Itispermittedtoreuse,shareandadaptthiswork,subjecttothefollowingterms: Attribution-appropriatecreditisgiventotheoriginalwork,thecopyrightholderand creator,andanychangesmadetotheworkareproperlyindicated. Non-Commercial-thework,oranyadaptationofthework,maynotbeused,distributed orreproducedinanyformat,byanymeans,forcommercialpurposes Share-Alike-thework,oranyadaptationoftheworkisdistributedunderthesame licencetermsastheoriginal,withaURLlinkprovidedtothelicence. EnquiriesconcerninguseoutsidethetermsoftheCreativeCommonslicenceshould besenttotheRightsDepartment,OxfordUniversityPress,attheaboveaddressorto [email protected]. PublishedintheUnitedStatesofAmericabyOxfordUniversityPress 198MadisonAvenue,NewYork,NY10016,UnitedStatesofAmerica BritishLibraryCataloguinginPublicationData Dataavailable LibraryofCongressControlNumber:2016949486 ISBN 978–0–19–879695–4 PrintedinGreatBritainby ClaysLtd,StIvesplc LinkstothirdpartywebsitesareprovidedbyOxfordingoodfaithand forinformationonly.Oxforddisclaimsanyresponsibilityforthematerials containedinanythirdpartywebsitereferencedinthiswork. Foreword Academicwritingonindustrialpolicyemphasizestheroleofconsultationand coordination with the private sector, both in designing appropriate public actions and in providing feedback. But, in many cases, a close relationship between business and government can lead to capture and inappropriate policychoices.Managingthetensionbetweenclosecoordinationandcapture isacentralchallengeinthepracticeofindustrialpolicy.Theacademiclitera- ture on implementing industrial policy, however, is remarkably light on practicalguidanceforpolicymakersastohowtoachievecoordinationwith- outcapture.Thereisperhapsnoregionofthedevelopingworldmoreinneed of this guidance than Africa, where twenty years of sustained economic growthhaveresultedinonlymodestindustrialdevelopmentandjobcreation, anissueincreasinglyemphasizedbythecontinent’sleadersthemselves. In 2014 the Korea International Cooperation Agency (KOICA) and the United Nations University World Institute for Development Economics Research(UNU-WIDER)launchedajointresearchprojecton‘ThePracticeof IndustrialPolicy’tocontributetothetopic.Thisvolume,writtenbynational researchersandinternationalexperts,presentstheresultsofthejointproject. The book consists of three parts, including framing essays that survey key topicsinthepracticeofindustrialpolicy,casestudiesfromAsiaaddressingthe evolutionofbusiness–governmentcoordination,andcasestudiesofeffortsto build business–government engagement in Africa. The objective is to assist policy makers develop close coordination between the public and private sector to identify, design, implement, and monitor policies to remove the constraintstoindustrialdevelopment.Whilesimpleimitationofinstitutional frameworks that have been successful in Asia is unlikely to bear fruit in the very different social and political context of Africa, a main purpose of this volumeisto‘deconstruct’successfulexperienceswithclosecoordinationand removethemfromtheirpoliticalandsocialcontextinordertocometogrips with the underlying institutional economics of the coordination process. These first principles may then be applied effectively in other institutional andpoliticalsettings. Iwould,onbehalfofUNU-WIDER,liketoexpressmydeepestgratitudeto JohnPagefortakingontheleadroleinthisproject,includingco-editingthis Foreword volume.Inaddition,Iwishtoexpressourgratitudetoeachoftheauthorsfor their willingness to participate in the project and for their insightful contri- butions.Finally,UNU-WIDERgratefullyacknowledgesthespecialprogramme contributionbyKOICAforthejointprojectandthecorecontributionstoits workprogrammefromDenmark,Finland,Sweden,andtheUnitedKingdom. FinnTarp Helsinki,November2016 vi Acknowledgements First and foremost, we would like to thank the Korea International Cooper- ation Agency and its staff for their collaboration in implementing the joint studyon‘ThePracticeofIndustrialPolicy’aswellasUNU-WIDER’scoredonor group of the governments of Denmark, Finland, Sweden, and the United KingdomfortheirsupporttotheInstitute’sworkprogramme. We would in addition like to express our sincere gratitude to all of the individual authors: Joseph E. Stiglitz; Justin Yifu Lin and Khuong Minh Vu; AlbertoLemmaandDirkWillemteVelde;RachelGisselquist;EunMeeKim; Rajah Rasiah; Hinh T. Dinh; Vu-Thanh Tu-Anh; Mulu Gebreeyesus; Haroon Bhorat, Aalia Cassim, and Alan Hirsch; Thomas Farole and Lotta Moberg; ErnestAryeeteyandNkechiS.Owoo;andJohnPage. Last but not least, special thanks go to the UNU-WIDER team, Janis Vehmaan-Kreulaforadministrativesupport,Anna-MariVesterinenforeditor- ialassistance,andLorraineTelfer-Taivainenforadviceandfacilitationofthe collaborationwithOxfordUniversityPress. Adam Swallow, Economics and Finance Commissioning Editor at Oxford UniversityPress,providedexpertguidancewiththepublicationprocess,and we are also grateful for the anonymous referee reports that helped sharpen ourfocus. JohnPageandFinnTarp Helsinki,November2016 Contents ListofFigures xi ListofTables xiii ListofBoxes xv ListofAbbreviations xvii NotesonContributors xxiii 1. OverviewandInsights 1 JohnPageandFinnTarp PartI. CoordinationandIndustrialPolicy 2. IndustrialPolicy,Learning,andDevelopment 23 JosephE.Stiglitz 3. CoordinationthroughanAsianLens 40 JustinYifuLinandKhuongMinhVu 4. State–BusinessRelationsasDriversofEconomicPerformance 63 AlbertoLemmaandDirkWillemteVelde 5. StateCapabilityandProspectsforCloseCoordination: ConsiderationsforIndustrialPolicyinAfrica 80 RachelM.Gisselquist PartII. CoordinationMechanismsinAsia 6. Korea’sEvolvingBusiness–GovernmentRelationship 103 EunMeeKim 7. TheIndustrialPolicyExperienceoftheElectronicsIndustry inMalaysia 123 RajahRasiah 8. CaseStudiesofDecentralizedCoordinationinChina 145 HinhT.Dinh
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